Nesheim Online Blog

STARTUP STAGE 4: TORNADO

Anything can happen during the tornado stage.

The objective is to get ASAP to the amazing moment when the startup has shifted from selling to taking orders. Orders coming in so fast that employees wonder if the wheels will stay on.

It’s a long way from first product launch to that moment – when sales are soaring, month after month. In between the founder and leaders will run into the unexpected, big surprises, major encounters that must quickly be deal with.

It’s the stage where the executioners of the plan for the new enterprise arrive in great numbers, to make the decisions that make the sales soar.

They are especially skilled at coping well with the daily unexpected, the big jolts, upset employees, angry customers, disappointing suppliers, pushy strategic partners, and vicious competitors.

They can recruit the vital people needed to continue the growth of the rapidly growing enterprise. They can keep disappointed employees on the job. And replace those that had to go.

When it breaks, they fix it. When it needs feeding, they deliver the food. When it needs to be left alone, they know when to step back and wait.

It’s a wild time, twisting and turning in unexpected ways. You will need those special people who love it.

I wish you The Best on your Adventure!

JOHN

Startup Stage 3: First Product Launch

It’s ready. To be launched. For people to use.

Emotions are at a peak. Everyone feels a sense of eagerness and elation, as well as doubts and fears. You will feel intense human reactions to real risk. High risk.

First challenge: Will the dog eat the dog food?

How eager will customers be to use it? How many will there be?

In this stage, serial entrepreneurs intensely focus on staying in touch with end users, reading emails from customer service feedback. scouring social media for comments good and bad, reading blogs that rave or dump on your precious new thing.

A few months after launch, reality settles in as statistics show how hot – or not – the first product is. One extreme or the other will emerge. Exciting or boring.

If hot, then your leadership team will put all of its resources into an intense drive, pushing as hard as possible to grow sales to larger and larger levels. Urgency prevails, your people keep looking over their shoulders to see if a competitor is behind them, racing to catch up.

If not hot, your leaders will huddle and start discussing what to change, and how to do that: alter the product features, its marketing, its technology, change sales channels -- anything that could get sales growing. Deep doubts sink in. Fear creeps inside. Talk begins about perhaps pivoting to a much different business. It's a dark time that can cause even the strongest character to give up.

Boring is all to common for the reception of a first product. That is one reason to do careful market research before launching. Asking real people what they think about your proposed product, what they would expect to pay for it, and what they would suggest be changed, are things something all serial entrepreneurs do. First timers seldom do that, and pay the price.

I wish you The Best on your Adventure!

JOHN

STARTUP STAGE 2: PROOF OF CONCEPT

Your idea is just the starting point. It will change – a lot.

It’s the lump of clay in the hands of the creative sculptor, intended to be shaped into something beautiful by lots of hard work and emotional outpourings.

You’ll begin thinking about how to craft a moneymaking business out of it. The founder and core team will work passionately nights and days to figure out what your first product should become. They will discover things not anticipated and will further alter the idea, week after week.

Your objective during this stage is to demonstrate, prove, that your now highly modified idea has both high market potential plus is able to be built and launched within a reasonable amount of time. That is called the proof of concept.

Your marketing leader will be rushing about, trying to figure out where the end users and customers are, what they want, what they expect to pay for your first product, and what gets them excited. And who else is trying to do what your company is going to attempt.

Your engineers will be buckling down at their workstations, figuring out what they can build with technology they can create. Meeting constantly, disappearing and re-appearing, the tiny tech group looks at the challenges facing them, trying to find solutions and breakthroughs.

Marketers and engineers meet weekly, hash over what they’ve learned last week, then alter their work and head off for another week of shaping the modified idea. Like the sculptor shaping the statue from the lump of clay.

It’s vital during this stage that you ask people. About the cool idea. Listen. Alter the idea. Repeat. Try a prototype build, see if it works. Alter the technology. Repeat. Until potential customers get very excited. Until your tech team is convinced, they can build it: a cool product that will excite a lot of people. “Wow! We’ve got it!”

Week after week after week. Pivoting, morphing, shifting – whatever you want to call it – it happens that way.

Until both marketing and tech are excited: They agree on what should be built for the first product, for which group of customers, at what price. Then they turn to intensely focus on two new activities.

1. The tech team begins to construct a crude prototype of something. Something important, vital. They work until they make it work. When that’s accomplished, the hardest challenge has been overcome. They proved it. Then the tech team is convinced they can build what marketing wants to be the first product for launch.
   
   
2. Meanwhile, marketing people scramble, gathering evidence. Their focus is on collecting facts that demonstrate people get excited about this first product in its initial form. They contact real people, the ones for whom the first product is ideally suited for. Marketing assembles numbers to show that there are a lot of such ideal customers in the world’s markets.

Finally comes the moment when everyone agrees: this is the first product we will launch. They agree on the final specifications.

Marketing starts to prepare for launch.

Engineering starts to build the first product.

The countdown for launch has begun.

BOTTOM LINE: This process – from Birth through Proof of Concept is chaotic. It drives to near insanity people who need order and crisp adherence to a documented plan. It’s heaven on earth for highly creative people, those who thrive on the unknowns and high risk. Nothing is certain. Anything can happen. And commonly does.

I wish you The Best on your Adventure!

JOHN